In a sweeping decision, the central government has overhauled the GST rates to a 2-tier system, scrapping the 12% and 28% slabs. The move is seen boosting sales, particularly for the consumer durables category, such as air conditioners, TVs above 32 inches, dishwashers, monitors & projectors, and solar water heaters.
AC demand set to rise: Elara Securities
After the new GST implementation, demand for room air conditioners or RACs may rise by a minimum of 10-15%, as per a report by Elara Securities. The industry size is estimated to be Rs 36,000 crore, and key manufacturers like Amber Enterprises, PG Electroplast, and EPack Durables are expected to be in focus. Along with retailers like Electronics Mart India, and Aditya Vision may see a spurt in volume growth, as per Harshit Kapadia of Elara Capital.
Despite a weak summer season in Q1FY26, the industry believes that the GST rate cut and change in energy rating in 2026 may lead the air conditioning industry to be flat to -5% compared to an earlier expectation of -5 to -10% in FY26.
There is a high RAC inventory of 2-3 million units, whereby the distributor or companies will have to bear the GST rate reduction loss of Rs 600-750 crore.
However, as of now, the industry believes that the entire GST rate would be passed on to consumers, which is similar to what was witnessed in the GST 1.0 rate cut.
TV sales set to move up: Elara Securities
In terms of TVs, the overall demand is expected to rise in the domestic market. The size of the market was approximately Rs 32,000 crore as of FY23, with TVs greater than 32 inches in size around Rs 70 crore. There is no direct beneficiary, but Dixon Technologies, which assembles TVs for numerous brands in India, may see volume growth in H2FY26. However, Dixon Technologies volumes have declined by double digits in FY25 and in Q1FY26.
Advantage Dishwasher?
Another interesting product that Elara Securities lists as a potential beneficiary of the GST rate overhaul is dishwashers. As per Kapadia of Elara Securities, “it’s still a nascent category in India with an estimated market size of Rs 700 crore.” The key beneficiaries are Voltas Beko, IFB Industries, etc.
Green push: Solar water heaters
There is a growing market for Solar water heaters in India. However, the overall revenue contribution is less than 1% of the total revenue in FY25 for key beneficiaries like V-Guard Industries and Havells India. As per Elara Securities, this is another key segment to watch.
What happened in the first GST-rate reform?
Under the GST 1.0, which was implemented in July 2018, the government had reduced GST to 18% from 28% on large appliances like refrigerators, washing machines, and electrical goods. Post that revamp, the revenue growth in large appliances revenue grew by 17% over H2 FY19 and 18% in H1FY20 for companies like Whirlpool of India.